A credit check is often the first stage of the tenant verification process, and with good reason. While it may not be completely foolproof, a credit screening is an easy way of determining whether or not a prospective renter is reliable.
In order to save time, many realtors will ask an applicant to simply print out their credit score themselves. While this may seem like an efficient tenant verification method, having them self-report their credit comes with a set of issues.
Reason No. 1: Credit Screening Is Not Just A Number
While someone’s credit score is a good indicator of their credit, it is just the surface. In order to conduct a proper credit screening, the full report is necessary.
A full credit report includes open tradelines, mortgages, student loans, credit inquiries, payment timeliness, outstanding bills, and much more valuable information that gives you an in-depth look at your applicant. A simple three-digit number isn’t going to do that for you.
Someone with a 750 score with a history of delinquent payments may be a less appealing candidate than someone with a 700 score and medical bills.
Reason No. 2: Credit Tampering Is a Real Thing
Picture this scenario: You currently have 20 total applicants over 4 different properties. You are drowning in tenant verification documents.
One applicant says, "Hey I printed out my credit score so you don’t have to access my credit report."
You gladly accept it and thank him for his kindness, right? WRONG. First of all, you should be dealing with all your tenant verification online, but that’s information for a different post.
Second, with the rapid growth of skill in editing programs such as Photoshop, it is important to be skeptical about everything. You’d be surprised to see just how adept people have become at altering pictures and videos. That video you saw on Twitter with the guy cliff jumping into a shark infested harbor? Yeah, that’s probably fake.
If people are able to edit complex things like videos and images, a simple number is nothing to anyone with a basic literacy of Photoshop. We would love to trust every applicant and the score they give us, but that simply isn’t the case. Err on the side of caution, and run the credit screen yourself.
Reason No. 3: Tenant Verification Covers More Than Just Credit
While credit screening is important, a comprehensive tenant verification process covers more. In addition to credit, you must run a background check and eviction history check on your applicant.
These two additional steps in verifying tenants are crucial. A comprehensive background check can determine if your applicant has a criminal history or is a registered sex offender. It is important to run a background check that covers multiple databases, including the Most Wanted, National Sex Offender Public Registry, and different state criminal databases. You don’t want your applicant slipping through the cracks.
Additionally, an eviction history report will see if your applicant is hiding any previous evictions. Referring a tenant to a landlord only to have them evicted will ruin your valuable relationship with that landlord. This will prevent any future deals with his or her properties, costing you both leads and commission.
Tenant verification is one of the most important aspects of dealing with rental properties, and it is paramount that you go beyond a simple credit screening while checking your applicant. It may be more work, but it is always better to be safe than sorry.